In today’s fast-paced world, innovation has become a critical factor for business success. No longer just for tech companies, today’s businesses must “innovate or die” – failing to evolve and continually come up with new and better solutions dooms an organization to fall behind its competitors, eventually to the point where it will collapse.

Quick Takeaways

• The companies of today must “innovate or die” in an increasingly competitive world.
• Innovation can only thrive in a supportive culture with strong leadership.
• Leaders must use empathy to build trust with their employees and champion their ideas – most businesses have all they need to be innovative in the talent of their existing people.

The Risk of Not Prioritizing Innovation

In the last decade, we saw many successful and longstanding companies shutting up shop, and the key cause of this failure is almost always a lack of innovation:

• Blockbuster, once worth $5 billion, was eclipsed by Netflix and other on-demand providers and closed in 2011 because they clung to their original DVD rental model.
• Bookstore Borders closed up shop the same year after failing to expand its online presence, instead opening more physical stores.
• Toys “R” Us filed bankruptcy in 2017 and closed all its stores a year later after 70 years in operation because it couldn’t compete with the price and convenience of online toy stores.
• Kodak, once a household name, failed to update its film-based business model against the rising trend of digital photography and faded into obscurity.
• BlackBerry completely ignored new innovations in touch screen technology and went from a market share of 50 percent of the global smartphone market at its peak to almost 0 percent by 2016.

So I was interested to read this McKinsey research into the link between leadership and innovation when I was writing Mean People Suck. Their survey of senior executives found that 70 percent said innovation was a top factor for growth in their companies, yet only 35 percent were confident in their abilities to promote a culture of innovation.

The research also recognized that there are no easy solutions or processes for generating innovation – innovation and creativity can’t be forced; they need the right conditions to flourish. Ninety-four percent of senior executives recognized that their people and corporate culture are the most important drivers of innovation.

McKinsey offers three main recommendations to companies trying to cultivate innovation:

1. Formally integrate innovation into senior leaders’ management strategy.
2. Make use of existing talent by creating the right conditions for innovation and creativity to flourish.
3. Foster a culture of innovation by building trust between employees and leaders so employees feel safe to take risks and express their ideas.

Why Empathetic Leadership Is Critical for Fostering Innovation

So where does empathy fit into all this? The McKinsey research continually drives home the point that a culture of trust is vital to create the right environment for employees to feel safe enough to be innovative, take risks, and share their ideas.

In fact, 30 percent of the professionals who responded to the survey believed that the organization already has the right people, but that corporate culture prevents innovation. In other words, a lack of innovation in most companies is not down to a lack of innovative thinkers, but rather a culture that stifles their creativity and makes them feel unable to express their ideas.

A further 46 percent of the employees surveyed said that they were far more likely to seek out a trusted colleague than an expert or manager to get new ideas and feedback on their own ideas.

If you consider your own career experience, I’m guessing this is true for most of us. How many times have you had a great idea at work but been reluctant to take it straight to your boss? Very few of us have the level of manager-employee trust required to have this confidence.

So, what is necessary to build that trust? Empathy.

Empathy means actively listening to people and showing you understand how they feel and their point of view. Empathy is all about action – you don’t show empathy through what you say, but what you do.

The company and corporate culture will not benefit from managers who seem sympathetic and take the time to listen to their employees’ ideas but then never take those ideas any further. In fact, this approach will actually erode employee trust as they learn that their leaders are simply putting on an act to appear open and approachable but are not actually really listening to what they say.

An empathetic manager, on the other hand, will not only listen to what their employees have to say but will also show they understand and value their opinions by actively championing employee ideas to boost innovation.

Innovation doesn’t happen in a corporate culture where everyone is simply too busy to be creative. It falls to leadership to prioritize innovation, approve the allocation of time and resources to new ideas, and build a supportive, empathetic culture of trust.

Many of the world’s most successful businesses build time and space for innovation into their corporate policies and leadership style. Google is famous for its “20 percent” time policy, where employees are encouraged to spend 20 percent of their working week experimenting with passion projects. While this policy was later ditched, many other companies, including Facebook, LinkedIn, and Apple, have their own version of programs that encourage free time to be creative and develop ideas.

Rewarding only short-term performance and penalizing failure is a recipe for ensuring innovation fails to thrive. Strong leaders give their employees the confidence to experiment, innovate, and take risks without fear of negative consequences. Empathy is the tool that enables them to do this.

So what do you think? Please consider picking up your copy of Mean People Suck today, and get the bonus visual companion guide as well. Or check out our services to help evolve your culture. And I would be thrilled to come present to your team on the power of empathy!